Marketing & procurement: Navigating collaboration challenges
By Ketlin Bonnar, Senior Consultant, Advisory Services, Corcentric
Marketing departments have traditionally operated independently, making decisions around spending based on campaign needs and market conditions. But with the surfacing of new media consumption channels and digital media buying, marketing has evolved as one of the most complex spending categories.
So why does the marketing team still not see procurement’s value? Marketing agreements are in most cases unique, and effectively navigating their development requires a special skillset and SMEs. The only way to know the uniqueness of this category is to work close to your marketing team and understand their needs. Both cost savings and value creation are crucial, but striking the right balance between them is often a challenge.
Marketing teams focus on creativity, brand development, and driving customer engagement. Each requires qualitative decision-making to manage their complex ideas and integrations of branding efforts like advertising, social media management, promotions and events. This clashes with Procurement’s traditional emphasis on cost reduction, supplier relationships, and operational efficiency. The slow and bureaucratic pace Procurement teams are comfortable with leads to frustration and a lack of perceived value from marketers.
Did you know that research has shown that procurement impacts 90% of the overall office consumables spending, but when it comes to marketing spending, the number goes down to less than 50%? How can we change that?
Bridging the Gap between Marketing and Procurement
One key challenge is to see the priorities through both – Procurement and Marketing – lenses, to understand how to work together. Marketing teams are driven by the need to deliver compelling campaigns under tight deadlines, which can sometimes lead to increased spending on creative assets, advertising, or technology. Procurement, on the other hand, is focused on budget adherence and finding cost-effective solutions, leading to a potential clash. Both teams need to establish clear communication and align on shared goals to overcome this misalignment.
If we step back for a moment to identify the mutual objective, both Marketing and Procurement are looking to improve ROI and achieve product value without compromising marketing impact. This way, they can together develop a strategy that balances creativity with cost efficiency.
Now that we have identified the challenges and the objectives, let’s dive into how to bridge the gap:
- Procurement should be involved from the ideation phase:
Procurement is great at problem solving but is often brought in too late to be truly effective. Many organizations overlook one of the most effective solutions to this problem: the early involvement of Procurement in all marketing plans while still in the ideation phase. Marketing can gain insights into cost-saving and strategic sourcing opportunities by including procurement at the initial stages of any campaign development. Likewise, Procurement can better understand the creative and time-sensitive needs of Marketing. This should be your first step when looking for ways to improve relationships.
- Managing metrics matters:
Without a shared method of quantifying success, both teams may think they’re accomplishing mutual goals while in reality just moving further apart. A shared measurement framework helps both departments assess success. While Marketing may focus on customer engagement, Procurement’s attention to cost efficiency can be integrated into a broader performance evaluation. While not always simple to accomplish, creating a shared measurement framework helps both departments assess success using common metrics. This way, both departments see the value in each other’s contributions.
- Nurturing the relationship on a regular basis:
Both teams may kick off a relationship with a firm commitment to each other. However, even the best relationships can break down over time. Regular cross-functional meetings, planning sessions and fostering a culture of collaboration can also reduce misunderstandings. When creating a space of mutual respect for each other’s skills and expertise, both Marketing and Procurement will see each other as strategic partners rather than opposing forces. They can achieve more efficient operations and better outcomes, driving long-term success for the organization.
- Strategic procurement approach for greater results:
Many relationships fail when one party doesn’t recognize (and rely upon) the expertise of the other. Procurement often serves as a liaison between agencies and Marketing. In this capacity, Procurement plays a critical role in balancing the sourcing requirements of the Marketing team with the drive for cost efficiencies, all while maintaining a good relationship with the Marketing Agencies. It’s essential to have Procurement people with specific knowledge of the marketing landscape and agency ecosystem to ensure a strategic approach to your Marketing team’s needs. They will be able to follow compliance policies and procedures when developing an RFP for example, uncovering additional benefits that may not have been noticed before. Marketing agencies put together pitch decks every day, and they have many standard ways to present their capabilities. That said, that won’t provide you with all the information you need on its own and what they do provide may not be the whole truth.
Crossing the bridge to the future state
Having a strategic marketing-based procurement perspective will help you enhance important requirements that Procurement can leverage through a tailored RFP. A well-designed evaluation process coupled with a complete questionnaire can reduce the number of unqualified proposals, putting Marketing in a better position to find the perfect match for their next campaign.
By addressing the challenges with these tactics, your organization can create a harmonious relationship between Marketing and Procurement, resulting in better cost control without sacrificing the impact of marketing initiatives.